TiVo vs. Big Cable: the ‘Integration Ban’ Explained

CQ Roll Call’s Rob Margetta has a story this week about the debate surrounding a provision in a satellite television bill that would do away with the “integration ban” in cable set-top boxes. Technocrat talked with Margetta about this seemingly obscure provision, which as pitted the cable industry and TiVo against each other.

Q:So, can you tell me — what is the integration ban?

A. So the integration ban was created in 2007 and it basically has to do with the decryption technology — the tuner boxes for peoples’ cable boxes.

It says that the cable companies and only the cable companies, not satellite providers, can’t directly integrate the technology for decryption into their own boxes. They have to have this physical thing, its about the size of a credit card, called a CableCARD. They have to have these in their boxes and they have to also provide them for third-party set-top box manufacturers, most notably TiVo.

Q:So, what was the intention of imposing the integration ban?

A: Well, the intent was to actually create a viable third-party market.

What Congress wanted and what the FCC was in charge of implementing was a system where the cable companies wouldn’t be able to have a monopoly on tuner boxes. Customers wouldn’t just be dependent on that box they lease from the cable company. There would be other technologies which would be presumably… the competition would build more sophisticated designs. You’d get essentially better cable boxes.

That hasn’t actually worked out due to a variety of roll-out issues with CableCARD. But that was the original intention — to create a level playing field.

Q:So, who wants to see the integration ban gone? Who wants to keep it in place, and why?

A: The answer to the first question is — just about everyone. The cable companies want to see it gone. Bipartisan members of Congress want to see it gone.

There really is almost no one defending dropping the integration ban, except these third-party manufacturers, most notably TiVo, who argue that if you remove this ban without a system to replace it, it’s gonna be very difficult for them to compete with cable companies.

They’re worried that all of a sudden cable companies could start having their own proprietary decryption and all of a sudden they cant build boxes that would work … for those cable company providers. Someone would go out and buy a TiVo and it would be useless if you have a particular cable company.

Now it’s worth noting that even though TiVo’s the loudest voice on this, the smaller companies actually could be more vulnerable than TiVo — the smaller manufacturers — [because] TiVo at least has a little bit of weight to throw around.

And even TiVo itself isn’t saying we [want to] keep the ban as it operates right now. What they’ve said is — get rid of the CableCARD. No one likes these physical CableCARDs, they’re clunky technology. But, we want a new encryption standard that could in fact be integrated into boxes.

So they’re saying do away with the cards, but don’t get rid of this ban until you have an encryption standard to replace it.

Q:So, if TiVo is advocating to keep the integration ban, who outside of Congress is advocating to get rid of the integration ban?

A: The easy answer is the entire cable industry.

And they make a bunch of different arguments … one which has been sort of criticized as just sort of spurious, where they say well you know the EPA estimates that these use so much extra electricity each year. But their main problem with it is they say it inhibits innovation because you’ve got to design any kind of box around this card.

And they also really do have a problem with when the FCC designed this ban, satellite companies were just completely left out of it. And they point out and a lot of people in Congress support this idea, that that was just a major oversight.

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Technocrat covers the tech and telecom community in Washington.

Anne L. Kim (@annekimdc) writes for Technocrat. She previously covered the details of legislative action for CQ Roll Call, where she focused on technology, science, transportation and health bills.